Government stalls on grey imports numbers

CARMAKERS have accused the Turnbull Government of playing “secret squirrel” over the numbers used to justify proposed changes to grey import laws.

Opponents of a relaxation of car import laws argue that the changes open Australia’s doors to a flood of cheaper imports which will adversely affect local buyers and dealers.

In support of the measures – which are due in 2018 – the government has said that up to 30,000 cars a year will be imported by Australian buyers looking to chase down a cheaper new car sourced from either Britain or Japan.

However, it will delay the release of the independent analysis used to predict how many cars the relaxed parallel imports laws will attract, until after this weekend’s federal election.

The analysis – widely quoted by Major Projects Minister Paul Fletcher, but yet to be independently verified – is believed to be embarrassing to the government and potentially damaging to the LNP’s bid for re-election.

“The government commissioned independent modelling by reputable advisers,” a spokesman for Fletcher told Wheels. “The government will provide more details of the modelling during the consultation process."

When asked, the spokesman declined to name the advisers the government used to prepare the modelling. He also declined to say why it could not be released ahead of the election.

Fletcher has used the modelling to back the government’s argument in support of introducing the relaxed grey import laws, claiming that over its first decade “the personal importation of new vehicles will provide a benefit to the economy of around $486 million”.

“The personal importation of new vehicles is not expected to have a material effect on local automotive dealerships, as the great majority of new vehicles will continue to be imported through the global manufacturers’ networks, and sold through the established automotive retail sector,” the government said.

“Dealers will also continue to have a major role in servicing vehicles and supplying parts. Similarly, the relatively small impact on the new car market will mean minimal impact on the asset values of the current fleet.”

That optimism isn’t shared among the carmakers, who fear that they – and buyers – will be the ones paying the cost of any fallout from the changes.

“The government's own department admitted at a Senate Estimates hearing that no modelling [on the impact the relaxed grey import laws would have on new-car dealerships] had been done,” an industry source told Wheels.

“Now it seems there has been modelling done, but the government won't let anyone see it. Surely the industry and the public are entitled to know when, by whom and at what cost this mysterious modelling was done,” he said.

“This sort of ‘secret squirrel’ nonsense is laughable and very concerning when it impacts the very future of jobs and investments in the industry.

“This is not a transparent process; it is opaque and the government can't hide behind secrecy on such a vital issue. It's a second-rate rerun of an old Yes Minister.”

Shadow industry minister Kim Carr told Wheels the government should release the analysis.

“I believe this isn’t the right approach to take,” Carr said. “We can’t allow the situation whereby this becomes the ethos of the day.”

Tony Weber, the chief executive of car manufacturers lobby group the Federal Chamber of Automotive Industries, said the Australian new-car market was one of the most competitive globally, and affordability was already “at record [low] levels”.

“If the government is so concerned about vehicle affordability, then we would welcome a conversation on that, particularly in regards to the Luxury Car Tax and taxation more broadly.

“But parallel imports provide no answers, only bigger problems on a raft of fronts,” Mr Weber said.

Documents seen by Wheels and released to carmakers as part of the government’s industry consultation, reveal it is looking at several layers of fees for the scheme. Another industry source said this would only further erode the benefits to buyers looking to claim a new-car bargain.

It is also looking to deflect all responsibility for critical safety updates to owners, and encouraging buyers to take out separate insurance to ensure the car delivered here is the one they thought they were getting.

The move to relax grey import laws has also raised ire amongst the coalition’s ranks. Key backroom figures including Member for Leichhardt in Queensland, Warren Entsch, and Tony Pasin, the Member for Barker in South Australia, have said they would not support the changes because of their likely effect on small businesses and regional communities – their core constituencies.